2012 has been an interesting year to be in the trade show software business. The industry is in transition, with show hosts, exhibitors, and attendees questioning the value of large events, and some even doubting the sustainability of physical events all together. In this article we will examine the relevance of face-to-face trade shows in an increasingly digital age, and how virtual technology is augmenting show organizers’ exhibition strategies. Our hope is to provide insights that inform your event planning going into the new year, and give you something to discuss with your associates at the (literal or online) water cooler.
Right now, getting a clear picture of what’s happening in the trade show industry is difficult. Depending on whom you talk to, the industry either had a banner or lackluster year in 2012. CEIR, the Center for Exhibition Industry Research, reported in September the eighth consecutive quarter of growth, citing more companies exhibiting, increased attendance figures, and, by extension, more buyers on the show floor (CEIR, September 2012). This, after the nose dive experienced following 2008’s recession and the subsequent economic slump.
These and other findings aside, some trade show professionals aren’t convinced. They argue that the physical model has become obsolete, with travel costs on the rise, carbon footprints to consider, and geographic sales barriers overcome with the aid of the Internet.
Because we operate in both sides of the physical/digital divide at Data Connect, we’ve been able to glean a unique understanding of the current landscape, which can help put these arguments into perspective.
To begin, we’ve observed a number of changes over the past 12 months, including:
- More companies are moving toward numerous small events and regional shows, tailored around specific products and audiences. The strategy behind this shift is a logical one: It allows show hosts to focus on new and promoted products with smaller audiences in order to capture new sales at a lower cost, thereby increasing margins.
- Many businesses are putting more emphasis on virtual shows and promotions. Much like smaller, more tailored physical events, virtual shows allow hosts to focus on key items with a smaller, more targeted audience, for less than the cost of a large physical event. Sales figures are rarely comparable to a physical event due to fewer products offered and the limitations of a company’s sales force to place orders online or adequately promote the event to their customer base. But the lower cost of the event can mean a more easily attainable ROI.
Which brings us to the next point: No matter how you slice it, digital marketing has a few things going for it that face-to-face marketing events simply don’t.
- Cost: Virtual events have low to no overhead. Since they are hosted online, show hosts forego venue rental, electrical and decorator charges, travel and hotel accommodations, and network fees.
- Immediacy: What takes months or years of planning in the physical world can often be executed digitally in a matter of hours or days. Virtual events can be planned and carried out quickly, and can capture sales like a physical trade event. They are especially effective for targeted promotions and product launches.
- Rich, Granular Metrics: Digital marketing has created more opportunities for data analysis than any marketing approach before it. Marketers and event planners are able to evaluate each impression, click, and conversion; every visitor, page view, page rank, geo-target, open, bounce, referral, friend, like, pin, and reblog, in order to determine the ROI of a campaign. With trade shows, there are only a few numbers that matter: attendees, buyers, sales, and leads. For underperforming shows, this limited data set can make it difficult to know how or where to make adjustments for future events.
On the other hand, physical events do have benefits that are hard to replicate in a virtual environment.
- Trust-building: Most buyers don’t want to make large purchases online. Prior to making a long-term commitment or buying something substantial or complicated like a refrigeration system or a piece of large equipment, they want to get to know the product and supplier, negotiate payment terms, and secure the best price. These are all things best or only done in person.
- Aggregation of Suppliers, Buyers, and Industry Peers: Rather than traveling around the state or country to source the ideal product, trade shows offer buyers a convenient platform to make purchasing decisions. And while show attendance may be down in certain sectors, companies are more serious about sending qualified buyers poised make purchasing decisions. Trade shows also offer a way to easily connect and converse with peers and make unexpected connections, which virtual shows and webinars have yet to comprehensively replicate.
- Revenue Generation: Here’s where the rubber really meets the road. By capturing a wider audience, offering more products, and keying in on the excitement of a show floor, face-to-face events generate more sales and leads than virtual shows. While virtual events have proved highly effective for new product promotions, specials, and new business retention, our analysis shows that the average virtual event generates only 35% of the revenue of a typical trade event. For companies that depend on their trade show revenue, abandoning the format may be a hard pill to swallow.
Now that we understand that both kinds of events have unique advantages, where does that leave us? Well, somewhere in the middle.
Our feeling is this: As more and more of our daily activities take place online, the value of experience-rich, digitally-integrated, highly targeted face-to-face events will increase.
The kinds of events that have typified many industry sectors—hulking, broad, inefficient, and, frankly, old fashioned—need to and will disappear. As they have begun to this year, some show hosts will react to this by experimenting with small event and regional show concepts. Others will integrate digital technology to maximize returns.
In order to leverage what virtual shows do well, and to create additional monetization opportunities, online tactics will increasingly augment physical trade events as we move into 2013 and beyond. Hybrid shows, which combine online measures with elements of a physical event, will begin to occupy more of the landscape.
With hybrid events, a physical show may take place in standard fashion, but video from seminars and demonstrations may be streamed online for virtual attendees. Online ad space may be sold to exhibitors, in this instance, allowing show hosts to generate additional revenue. Other hybrid models may conduct a virtual sales event concurrent with or immediately following the face-to-face event. The result of each of these scenarios is that show hosts capture as large an audience as possible. Hybrid events make it easier for more buyers and prospects to connect with suppliers, while also allowing those that could not attend to take advantage of the educational opportunities available at the physical show.
At this point you might be asking how you, as a show host, can begin to integrate some of these new strategies into your events.
There a few things you can do right now to improve your show’s ROI without reinventing the wheel entirely.
- Expand Your Reach: Inform more attendees about your show through your company website, blog, social media channels, or dedicated event website. Record video of your guest speakers and seminars and make it available online following your event. This will give attendees an opportunity to review what they experienced at the show, and help market your event to prospective attendees, or your business to prospective customers. Digital is unlikely to replace the physical, but can help maximize attendance and sales on each and every event you host.
- Help Your Attendees Help You (and Themselves): Provide online and printed resources so that your attendees know which booths to visit, which seminars to attend, and how to take advantage of any promotions or specials being offered. Uninformed attendees left to their own devices do not get the results they want or generate the sales you need from an event.
It’s important to realize that although it may be predicated upon different circumstances, much of what’s happening right now is cyclical. Every five to 10 years, show planners seem to get restless and move away from larger physical events, only to return to the format a year or two later. Awareness of what’s happening in your market sector is vital, but it’s more critical to understand the value that your events have within your company. If your event accounts for a large share of your annual revenue, moving to an entirely new format may be unadvised. That doesn’t mean resting on your laurels, but instead increasing the value of your event by taking steps to incorporate new digital tactics.
We’ll end with some wisdom from Dr. Michio Kaku, futurist and theoretical physicist, who presented the keynote address at last year’s IAEE Convention in Las Vegas:
“Face-to-face marketing, powered by tech, will only get stronger. It’s a basic human need to come together to learn, buy, sell and grow. Share stories around the campfire. Show off the biggest kill. Bond. It’s in our DNA.”
What do you think the roles of virtual and face-to-face events will be in the future? Do you agree that we will be seeing more and more hybrid events in the coming years? Let us know your thoughts in the comments below.